in the office fortune favours favours friction. ... popular in japan—passion—the letters...
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46. The CEO Magazine - January 2016 theceomagazine.com theceomagazine.com The CEO Magazine - January 2016 47.
In The OfficeEXECUTIVE INTERVIEW
FORTUNE FAVOURS FRICTION
After 11 years at TMD Friction, CEO and President John Hudson has the experience and knowledge of the company to take it into the future.
Images by Mauro Bellisimo
As the oldest friction manufacturer in the world, TMD Friction [TMD] knows its industry. The company produces everything from disc brake pads and drum brake linings for everyday passenger and commercial vehicles, to brake pads for top racing cars and industrial applications such as for the wind turbines that generate clean energy. TMD produces more than one million products per day in 15 production sites located in 12 different countries on five continents.
Following a 50-year relationship with the Japanese group Nisshinbo Holdings Inc, Nisshinbo acquired TMD from its private equity owners in late 2011. The CEO
Magazine spoke to John Hudson, CEO and President of TMD, about that acquisition, the opportunities he saw when taking on the CEO role, the companys commitment to being a leader in its chosen field, and whats next for TMD.
The CEO Magazine : What key roles in your professional background have contributed to your leadership style now?
John: Im a chartered accountant by background, having trained with what is now KPMG. Following a five-year period with KPMG, I then spent some 20 years in the chemical industry with ICI now part of Akzo Nobeland INEOS. I joined TMD in 2004 in the group CFO role as part of a restructuring of the senior
management team by its private equity owners. Together with the new CEO, we led an operational and financial restructuring of the group, which ultimately led to the sale to Nisshinbo in November 2011. The seven years leading up to the Nisshinbo transaction included the very exciting and challenging period through 2008 and 2009 where we all learned many new life-critical skills, some of which we would rather not have learned!
Over the last 30 years, I have lived and worked in Singapore, Germany, Belgium, and the UK, and many of the roles have also given me the chance to experience the working cultures across most of AsiaPacific, the Americas, and Africa. The finance roles have been
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48. The CEO Magazine - January 2016 theceomagazine.com theceomagazine.com The CEO Magazine - January 2016 49.
in both group corporate as well as business responsibilities, and I have previously had CEO responsibility for running business units. During these times, I have built four different finance teams and two group management teams around the world.
Looking back, the many and varied experiences have given me the skills to live and work in many different cultures, how best to build and motivate employees as well as the financial skills from my professional training. My cultural awareness skills also come from being born and growing up in Africa.
With my understanding of TMD and my cultural approach, Nisshinbo Holdings asked me to stay on after the acquisition and to step up into the CEO role.
What were the opportunities you saw for yourself when you decided to take on the role of CEO at TMD Friction?
TMD is the oldest automotive friction manufacturer in the world.
The company started in 1878 in Dundee, Scotland, and over the last 137 years it has been at the forefront of technology development for automotive friction, whether thats manufacturing technology or product technology.
Its history is incredible. If you think of the many wonderful classic European cars, TMD probably supplied the majority of these cars when they were first built with our brands Mintex, Textar, and Pagid. We have a pedigree in the racing area, having supported Formula 1 and saloon car racing for many years. We exited from Formula 1 when the braking technology changed to carbon-carbon for discs and pads but we continue to support saloon car and rally cars. We have supplied friction solutions to many of the race teams in Europe and in the USA, particularly for NASCAR. We have supported drivers like Jack Brabham, Sterling Moss, Fangio, Carlos Sainz, and many others to win their races, and we were the manufacturer chosen to supply brake pads into the first
caliper brake system developed for carsthese were first used on the Jaguar C-type race car in 1953. Today, we are still known as the guys who solve difficult braking issues and we supply friction to cars ranging from small cars such as the Renault Dacia Logan and the Toyota Yaris, to the BMWs, Audis, and Mercedes, and up to the high-performance cars such as Aston Martins, Ferraris, Porsches, and Bugatti Veyron.
We had made many improvements to TMD in the years leading up to the acquisition but this tremendous heritage was not being put to good usepartly due to the many ownership changes over the last 20 years. We had forgotten our DNA and how to use it.
With TMD becoming part of the Nisshinbo organisation, I could see how we could bring more of our history and DNA into good use inside and outside the organisation. We could make better use of it in the way that we support customers, the way we work with suppliers, and the way
that we develop and promote people inside TMD.
Importantly, we could also use it as we started to reshape TMD to better align with our Nisshinbo colleagues as, together, we began to define how the largest automotive friction supplier would gradually integrate activities to better serve our worldwide customer base.
With Nisshinbo Brake, we are clearly the world number one for on-road brake friction, and being CEO of a business that is part of the leading global player is a fantastic opportunity. Another reason for saying yes to the role was that having gone through two corporate cultural changes in my life with ICI and with INEOS, I understood what was involved and understood how to support our Japanese colleagues in the journey to combine the best aspects of two culturally very different organisationswestern and Japanese. To say the least, it is quite a challenge, but its also an exciting one!
What have been some of the challenges involved for you personally, and also for TMD over recent years?
I can describe these in two different ways.
The first challenge with our new Japanese colleagues was to really learn to understand what each of us was saying. We might use the same English word, but that word could have very different interpretations of meaning. For example, the word quality. In Japan, the concept of quality is part of everything a Japanese person does and this is instilled from birth. In the western world, we have to be taught about quality! To deal with this, we set about defining and agreeing how to interpret particular words and phrasesa new dictionary, if you like.
There is a wonderful Japanese word called Nemawashi, which means consensus building. If you
think of, for example, the way that Italians work, the Italians tend to do a lot of consensus building outside of meetingsin corridors, over a coffee, and so on. The decision is already made and the formal meeting is, in many ways, a formality! The Japanese approach is quite similar; a consensus is reached well ahead of the decision meeting and all people involved have their input. Its very different to the way the Germans or the English work. Its fascinating learning about the different cultures, and looking at how to put a structure in place, a virtual structure, that allows Japanese colleagues to understand what we mean and interpret it in the same way that we would interpret it, and then allow our European colleagues to understand what their Japanese colleagues are trying to say.
The second challenge has been how to change the culture of the TMD organisation. For years, it has been under the ownership of various private equity investment groups. Today, it is part of a long-term, strategic industrial corporation. The approach to managing and growing the organisation and its people is very different now and we needed to ensure our TMD colleagues understood that it was time to
change. We adopted a concept popular in JapanPASSIONthe letters standing for profit, ambition, sincerity, strength, innovation, optimism, and never give up. It is an approach famously developed and used by Kazuo Inamori, a philanthropist, Japanese entrepreneur, and retired CEO of Kyocera Group. He used the approach to build Kyocera into a worldwide organisation and has recently used PASSION to reshape and restructure Japan Airlines [JAL]. PASSION is a Japanese cultural interpretation of many western business and management school theories. Importantly, it focuses on the employees, their involvement in the daily business life, and contribution to growing an organisation. It also helps to clarify the vision and mission of an organisation and to strengthen the approach to corporate ethics (the sincerity part).
Cultural change is more a journey than a project; you never reach the end of the journey as we live in an ever-changing world. However, it is a unifying journey and for TMD this has enabled us to better understand how to work with and grow with our Japanese colleagues.
Those are two of the major challenges faced over the last three years. At the same time, we took